Question
A company is expanding operations and opening a new facility. The executive leadership team decides to purchase an insurance policy that will cover the cost of rebuilding the facility in case of a natural disaster. Which of the following describes the team's decision?
- A. Business continuity
- B. Disaster recovery
- C. Risk transference Correct
- D. Memorandum of understanding
Explanation
Buying insurance shifts the financial impact of a risk to a third party, which is risk transference. Business continuity and disaster recovery are plans for keeping operations running and restoring systems after an incident, not decisions about who bears the cost. A memorandum of understanding is a non-binding agreement between parties and has nothing to do with insuring a facility.
